Sepp Blatter, two deputies took $81 million in pay and bonuses, FIFA launches bribery and corruption case

FIFA’s ethics committee said Friday it has opened formal proceedings against former FIFA president Sepp Blatter and two of his ex-deputies for taking huge salaries and bonuses.

Facing charges with Blatter are former secretary general Jerome Valcke and former finance director Markus Kattner.

An investigation for FIFA by U.S. law firm Quinn Emanuel found that Blatter, Valcke, and Kattner collected $81 million in compensation from 2011 to 2015.

Quinn Emanuel said in June the payouts resulted from a coordinated effort by the three officials to “enrich themselves through annual salary increases, World Cup bonuses and other incentives.”

Blatter, 80, led FIFA from 1998 until 2015. He has already been banned from soccer for six years.

The ban relates to a $2 million payment to former Uefa president Michel Platin. FIFA made the payment in 2011 for work Platini said he did for FIFA from 1998 to 2002. Uefa is the governing body for European soccer.

Switzerland opened criminal proceedings against Blatter over the Platini payment, alleging mismanagement and misappropriation. FIFA — the Fédération Internationale de Football Associations — is based in Zurich.

In January FIFA fired Valcke for ethics violations that included selling World Cup tickets, taking money from FIFA for personal travel, and destroying evidence. He has been banned from soccer for 10 years.

Kattner took over as acting secretary general after Valcke was fired. FIFA also fired Kattner in May this year “for breaches of his fiduciary duties to FIFA.”

Blatter took a $12 million bonus after the 2014 World Cup in Brazil. He would have received another $12 million bonus if he had completed his term as FIFA president in 2019.

Valcke collected a $10 million bonus for the 2014 World Cup and was due an $11 million bonus in 2018.

Blatter, Valcke, and Kattner now face allegations that they breached FIFA rules on bribery and corruption, conflicts of interest, and “offering and accepting gifts and other benefits.”

Kattner also faces a charge of possibly breaching confidentiality.

Quinn Emanuel said in its June report there were multiple amendments to their contracts, often approved and entered into on the same days. The firm said the timing of the amendments was “ominous.”

Valcke and Kattner’s contracts were amended so they would “receive payment of the full value of their contracts (i.e. up to a maximum of 8.5 years) even if they were terminated for just cause.”

Quinn Emanuel said that clause — and another provision that would force FIFA to pay all their legal fees and any associated fines and restitutions, even if they were found guilty — appeared to violate Swiss law.

All three have denied wrongdoing. Blatter said his pay was consistent with other top sports officials.

* * *

In the United States, the DOJ has charged 42 defendants in a FIFA corruption prosecution. About 16 defendants have pleaded guilty, according to public records.

Most of the defendants were charged with racketeering, wire fraud, and money laundering conspiracies.

Blatter wasn’t charged in the U.S. case.

On Friday FIFA banned its former vice president Jeffrey Webb for life and fined him $1 million for taking bribes.

Webb also headed CONCACAF, the governing body for soccer in North America, Central America, and the Caribbean.

The deputy chairman of the investigatory chamber of the Ethics Committee, Djimbaraye Bourngar, has opened formal proceedings against Joseph Blatter, former President of FIFA, Jérôme Valcke, former Secretary General of FIFA and Markus Kattner, former Acting Secretary General and Director of Finance & Corporate Services.

The investigatory chamber will investigate possible violations of art. 13 (General rules of conduct), art. 15 (Loyalty), art. 19 (Conflicts of interest), art. 20 (Offering and accepting gifts and other benefits) and art. 21 (Bribery and corruption) of the FIFA Code of Ethics (FCE) in the context of salaries and bonuses paid to Mr Blatter, Mr Valcke and Mr Kattner as well as other provisions included in the contracts of these three individuals.

Furthermore, the investigatory chamber will investigate a possible violation of art. 16 (Confidentiality) of the FCE by Mr Kattner.

Under the FIFA Code of Ethics, the investigatory chamber shall examine all circumstances of the cases equally. For reasons linked to privacy rights and the presumption of innocence until proven guilty, the investigatory chamber will not publish further details at the present time.

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Richard L. Cassin is the publisher and editor of the FCPA Blog. He’ll be the keynote speaker at the FCPA Blog NYC Conference 2016.

Founder of the FCPA Blog and Editor at Large. He has been named multiple times as one of the 100 Most Influential People In Business Ethics by Ethisphere Magazine and is a Trust Across America Top Thought Leader. He’s a member of the DC, Virginia, and Florida bars. His At Large column is a regular feature of the FCPA Blog.

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